Morgan Stanley sees blips in India growth | business | Hindustan Times
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Morgan Stanley sees blips in India growth

Global financial services firm Morgan Stanley is still cautious on India as it feels there could be more adjustment in India’s growth expectation. The firm finds Indian equity market expensive as compared with other emerging markets such as Russia, Malaysia, South Korea, Brazil.

business Updated: Jun 01, 2011 23:16 IST
HT Correspondent

Global financial services firm Morgan Stanley is still cautious on India as it feels there could be more adjustment in India’s growth expectation. The firm finds Indian equity market expensive as compared with other emerging markets such as Russia, Malaysia, South Korea, Brazil.

“There will be more adjustment in growth expectation and growth performance because more tightening is needed in India then elsewhere,” said Jonathan Garner, chief Asian and emerging market equity strategist, Morgan Stanley. “We are underweight for India.”

The firm has put India in ‘underweight’ category along with countries such as Chile, Peru and Mexico. While China, Malaysia, Russia, South Korea and Brazil are on overweight category, which are attractive to global investors due to cheap valuations.

“India has become expensive in comparison with other emerging markets,” he said. According to Garner institutional investors will bet on countries in overweight category while will keep distance from India in near term.

Morgan Stanley believes that the Reserve Bank of India has been behind the curve in containing inflation. “Indian central bank is one of the central banks in the world that has been too slow in tightening monetary policy to combat inflation,” he said. However, the firm expects inflation to fall by the end of current financial year.